which lender for mortgage

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hadoopsravanthi
Posts: 1
Joined: Thu Nov 07, 2019 7:39 pm

which lender for mortgage

Post by hadoopsravanthi » Thu Nov 07, 2019 7:50 pm

Hi,

For 500k single family home, when we are paying 20% down payment for 15 years with good credit score 750 +, got 2 offers. Which is better .

Credit union is giving 2.875% for 15 years and where in other sellers preferred lender giving 3.0 % with 5000$ discount in closing costs. which is better among those two.

Thank you.

snailderby
Posts: 353
Joined: Thu Jul 26, 2018 11:30 am

Re: which lender for mortgage

Post by snailderby » Fri Nov 08, 2019 12:36 pm

Welcome to the forum!

1. Do you have loan estimates from both lenders? You'll want to compare total closing costs for both lenders to do an apples-to-apples comparison. Anecdotally, many credit unions seem to have higher closing costs.

2. After you have this information, calculate (1) the difference in closing costs and (2) the difference in your monthly payment between the two loans. Then divide (1) by (2) to determine the break-even point. If you plan to stay in this house longer than the break-even date, the loan with the lower interest rate may be a better deal. If you don't plan to stay in this house that long, or if you think you may want to refinance before then, the loan with the lower closing costs may be a better option. As always, YMMV.

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dm200
Posts: 22050
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: which lender for mortgage

Post by dm200 » Fri Nov 08, 2019 12:43 pm

hadoopsravanthi wrote:
Thu Nov 07, 2019 7:50 pm
Hi,
For 500k single family home, when we are paying 20% down payment for 15 years with good credit score 750 +, got 2 offers. Which is better .
Credit union is giving 2.875% for 15 years and where in other sellers preferred lender giving 3.0 % with 5000$ discount in closing costs. which is better among those two.
Thank you.
An important factor to me has been to select a mortgage lender that does not sell the servicing of the mortgage. In my opinion, having the same place to send your payments over the life of the mortgage is likely to reduce the risks of needing to change payees over time.

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